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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: JDN who wrote (32889)	6/18/2000 10:25:00 AM
From: fuzzymath	Read Replies (1) \| Respond to of 64865

Ah, a challenge! This sounds like fun! I've marked my calendar: 7/12. But, I'll still have been "right" if we have a nasty little dip before then. You'll be right if following June 30 volume picks up and the market rallies. Maybe we'll both be right... More good points, JDN. The missing day traders are part of the reason for the low volume. But historically volume dips after the market calms down following a big drop. Today it's the day traders who have run off scared. In the past, it was individuals who had very little experience in stocks entering the market near the peak, then exiting after the "crash". Kevin

To: JDN who wrote (32889)	6/18/2000 10:33:00 AM
From: E_K_S	Read Replies (2) \| Respond to of 64865

Hi JDN: How does one quantify the "Social Capital" a company earns in the financial analysis? It appears SUNW may be reinvesting in their "Social Capital" with some of these new contracts (ie E-Bay) where it is perceived that they are giving away the store. Also, it was pointed out by Bob Brinker that several of these technology companies (ie Intel) include investment income in their quarterly operating earnings. As a result, investors value this income stream at the same PE (or higher) as the on going operation. This results in an extra over valuation for the company. Any idea as to what SUNW's investment income is for the previous quarter and what SUNW's forward PE would be if this income stream is backed out? =========================================================== What Sun did right By Ryan Tate (Upside.com) (http://www.upside.com/Executive_Briefing/39497d450.html) June 16, 2000 Get-rich tip: Social capital counts as much as the economic kind. Witness the success of Sun (SUNW): before the Web exploded in the mid-1990s, Sun was an enterprise market has-been eating Hewlett Packard's (HWP) dust. But while the company was lacking in economic capital, it had a vast store of the social kind, which is created when an organization or person is plugged into important networks of people. Sun acquired its social capital, according to MIT online communities guru Philip Greenspun, by selling loads of servers to universities on the cheap throughout the 1980s and by granting great lease terms to venture capitalists in the 1990s. This strategy was smart on the one hand because programmers were coding the free software behind the Internet in university computer science departments -- on Sun hardware. That meant that essential Internet code ran without modification on Sun machines. And it was smart on the other hand because Sun was engaging small Valley firms when they couldn't get the time of day from other enterprise players. ============================================================ As far a valuation, SUNW has a high valuation where (1) in one case "Social Capital" investments in the future may be understated and (2) investment income (from their equity VC investments) may actually over state the current value; AND as a result the "true" valuation is impacted by these other "non-operating" (financial) factors. Then there are the "non-financal" factors too. One has to place a premium on management as they continue to deliver quarter after quarter of 20% or better growth. In summary, I have concluded that using a straight financial valuation model provides a good start, but there are many other non-operating and non-financial factors that impact a stock's value too. TA is a road map from the rear view mirror and perhaps a short term trend can be obtained based on OBV, MA and supply & demand trends, BUT in all cases (from my experience) long term trends are missed. You make your big returns (ie capital gains) from these long term trends. EKS

To: JDN who wrote (32889)	7/13/2000 9:01:43 AM
From: fuzzymath	Read Replies (1) \| Respond to of 64865

JDN, now let's see who was right (if either of us!). On June 17 I said the price / volume recent action combined with my models suggested we might be ready for another 10% correction. Well, that didn't quite happen. The dip from the 6/15 NYSE peak was a puny 3% or so at its worst. You said after July 4 both volume and price would pick up. Well, we have had a small rally since then, but volume hasn't been much different from what it was in June. So--I'd say neither of us did a great job of prognostication. Now for the important point: did we make any money? I hopped into BEA Systems (BEAS) for some if its very nice recent rise. Aside from that, my picks just flailed around aimlessly. By the way, my models are again wondering where we'll go from here. The NYSE Index is again near the 665 ceiling that has been a blockade for the past two years. More than 10 times the NYSE has approached 665, only to fall back. Happy investing! Kevin